Our scoop on the 2024-25 Federal Budget and critical takeaways for Small to Medium Businesses in Australia.
As business professionals, being well-informed about the latest financial developments can help you make sound financial decisions for your business. Let's dive into the key takeaways from the 2024 Australian Federal Budget that specifically impact small to medium businesses like yours.
$20,000 Instant Asset Write-Off Extension:
The government has extended the $20,000 instant asset write-off for small businesses until 30 June 2025. Small businesses with a turnover of less than $10 million can immediately deduct eligible assets costing less than $20,000 if used or installed by 30 June 2025. Assets exceeding the threshold can be added to the general small business pool and depreciated at 15% in the first income year and 30% in subsequent years. It's important to note that while a similar measure was announced in the previous Budget, it is still awaiting legislative approval. As a result, businesses should stay cautious and be mindful of the applicable write-off limits when acquiring assets.
Energy Rebate for Small Businesses:
The Budget expands the Energy Bill Relief Fund, providing $3.5 billion in energy bill relief for all Australian households and eligible small businesses. Starting 1 July 2024, approximately 1 million small businesses will receive a $325 electricity bill rebate. This initiative aims to alleviate cash flow pressures and help manage the cost of living.
Changes to ABN System:
Previously announced changes to the Australian Business Number (ABN) system, designed to combat black economy activities, will no longer proceed. The government has determined that enhanced administrative processes implemented by the Australian Taxation Office (ATO) effectively address the integrity issues associated with the ABN system. Therefore, ABN holders no longer need to lodge their income tax returns or annually confirm their details on the Australian Business Register.
Debts On Hold:
The ATO previously exercised discretion by placing certain tax debts on hold and refraining from offsetting taxpayer refunds in specific situations, such as low-income taxpayers. However, existing laws do not explicitly permit this discretion. The Budget introduces amendments to grant the Commissioner of Taxation the authority to exercise discretion and refrain from using taxpayer refunds to offset tax debts placed on hold before 1 January 2017. Small businesses, individuals, and not-for-profits will benefit from this change. Detailed guidelines on when the ATO will exercise this discretion and the turnover threshold for eligible small businesses are yet to be announced.
Small Business Helpline:
To support small business owners' mental health and financial well-being, the government will allocate $10.8 million over two years from 2024-25 to extend the Small Business Debt Helpline and the NewAccess for Small Business Owners program. These programs offer valuable financial counselling and mental health support to help small business owners navigate the challenges of running a small business.
Conclusion:
Staying on top of the latest financial developments ensures you can optimise your business's financial outcomes. By understanding the key takeaways from the 2024 Australian Federal Budget, you can make informed decisions regarding asset write-offs, energy rebates, tax debts, and access to support services. Remember, consulting with trusted financial advisors and accountants will provide personalised guidance based on your circumstances.
Visit https://budget.gov.au/ for the full scoop of the 2024 federal budget, or download the full report.
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